Some 4.3% of FHA loans and 7.5% of VA loans are underwater, according to Intercontinental Exchange’s November mortgage report.

Servicer removals tied to FHA delinquencies and foreclosures increased 31.0% from the second quarter.

The total delinquency rate on FHA loans in Ginnie MBS hit 10.90% at the end of September, up 51 bps from the end of June.

Total outstanding balance of single-family mortgages in Ginnie Mae mortgage-backed securities increased by 2.2% from the end of June to $2.65 trillion as of the end of September.

Loans without mortgage insurance gained some share in the agency MBS market during the third quarter.

VA refi volume was down 31.5% from the second quarter, while FHA refi volume slipped 10.3%.

FHA and VA mortgages tend to have sharply different prepayment rates but they're put together in Ginnie MBS, potentially penalizing FHA borrowers.

Since mid-2022, the agency has been gaining servicing share with lenders turning to FHA mortgages and loans through the Department of Veterans Affairs.

The flow of refinances declined 21.5% on a monthly basis to $8.90 billion in July.

“Gravity is being tested,” said Mark Garland, a managing director at SitusAMC.